BIMLA JAIN Vs. JAIN PLASTIC WORKS

JUDGEMENT

(1.) THIS application under Section 11 of the Arbitration and conciliation Act, 1996 has been filed by the petitioner/applicant for appointment of an Arbitrator. It is submitted by the applicant that the applicant had entered into a Partnership Deed with respondent no. 2 and a partnership firm in the name of respondent no. 1 was constituted on 1st April, 1993. The shares of the applicant and respondent no. 2 was 50% each in profit and loss of the firm. As per clause 14 of the Partnership Deed, Respondent No. 2 was working partner with responsibility to look after the business of the firm and the applicant, a household lady was the sleeping partner. Applicant reposed trust and faith in Respondent no. 2 (who was younger brother of her husband ). It is stated that with passage of time intention of respondent no. 2 became malafide and he starting diverting funds of the Partnership firm for his personal use and out of the earnings of the firm purchased immovable property in the name of his wife though his wife had no source of income. He also purchased property in his own name out of the funds of the firm surreptitiously, without knowledge of Plaintiff. Applicant/petitioner has listed three properties which were alleged and purchased by respondent no. 2 out of partnership funds either in his own name or in the name of his wife. It is stated that taking benefit of the applicant's confidence in him, respondent no. 2 got signed certain blank papers from the applicant and got the same converted into Dissolution Deed dated 15th January, 2004 about which the applicant learnt about a year back. It is submitted that a bare reading of the clauses 4,5 and 8 of the Dissolution Deed shows that while fabricating the Dissolution Deed, no application of mind was done. There was no settlement of accounts, neither the books of accounts were got signed from the applicant. It is submitted that Dissolution Deed was a forgery and the applicant continued to be a partner. Applicant requested respondent no. 2 to settle the accounts and vacate the premises but respondent no. 2 avoided the same. Applicant thereafter invoked arbitration clause no. 13 of the Partnership Deed, which reads as under:

(2.) APPLICANT also made wife of respondent no. 2 as a party on the ground that properties were purchased in her name. Applicant submitted that a dispute existed between the parties and since respondent no. 2 declined to accede to the request of the applicant for appointment of Arbitrator as stated in notice dated 5th January, 2007, applicant was entitled for appointment of an Arbitrator.

(3.) RESPONDENTS in their reply have stated that the application was bad for mis-joinder of parties since respondent no. 3 was not a party to the arbitration agreement and could not be made a party to the application. It is further stated that notice was issued on 5th January 2007, but the same was received by respondent no. 2 on or about 25th January 2007. However, the applicant prepared present application/petition on 9th January 2007 and filed it on 11th January 207. The petition was therefore pre-mature and liable to be dismissed. It is also stated that there was no arbitration agreement between the parties. The petition was hopelessly barred by the provisions of Limitation act, since according to applicant she came to know of Dissolution Deed sometimes in January, 2006 but for one year she did not file the petition, therefore petition was time barred. It is however, not denied that the partnership agreement dated 1st April, 1993 was entered into between the parties, but the stand is that this Partnership Deed itself came to an end on 15th January, 2004 after parties mutually decided to dissolve the same and all accounts of the parties were settled accordingly and intimation was given to the Sales Tax and income Tax departments. About the properties, it is stated by respondent no. 2 that the properties were not purchased out of the funds of the firm and they were purchased from the personal funds of the respondent no. 2 and his wife.